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Human Capital ROI: Sales Recruitment Must Be Justified Like Any Other Expense

If a smart business owner considers an investment, whether it is for a new refrigerator in his or her home or for the acquisition of a rival company, a strict ROI calculation precedes the purchase. Is this investment worth the money? Will the return be significant enough to justify the purchase?

Responsible, practical people answer these questions before committing to any expenditure in both their personal and business lives. There are exceptions, and sometimes the hiring of new salespeople falls into this category.


A New Salesperson is Not Always the Answer

When sales numbers are not adding up to what they should be, it is often natural for leaders to assume a new hire will solve the problem. This is very sadly, sometimes driven by a blind hope that the new recruit will be a sales superstar who hits the ground running and fills the gaps that are causing the problem.

Blind recruiting, however, won’t solve the problem. In fact, it often makes it worse for one of three reasons.

First, a new hire can’t fix a leaky lead bucket, repair an ineffective qualifying process or adapt to a vision that hasn’t been properly articulated from the top. If foundational problems exist, no amount of new blood will be able to lift sagging numbers.

Second, when management determines that a new salesperson is the best solution without thinking it through, it is easy to choose the wrong person. If none of the candidates impress during the recruitment process, the hiring manager may feel backed into a corner and just pick the best of the lot that was presented to them at the interview stage.

Finally, times of low sales volume create budgetary constraints. It is therefore even more important to exercise caution in hiring during the lean times — yet this is exactly the time when many companies are the most reckless in bringing on new recruits.


Sales Recruitment: Human Capital Investment

Stakeholders should examine the possibility of hiring new recruits just as they would any other investment. Leaders should apply the same strict cost/benefit analysis and ROI calculations to hiring that they would to any other expenditure in business.

Every investment — including human capital investment — must present a clear return to justify the expense. Is a new salesperson the best solution? If so, what are the strict criteria by which we will hire? If not, how are those resources better spent in dealing with the problem?

It is easy to hire a new salesperson, but the easy solution is often not enough. A new hire — even if he or she is a talented salesperson — can’t fix foundational deficiencies or act as a silver bullet to larger problems in the sales process. Hiring a team member is an expense, and like any expense, it can only be justified after meticulous ROI analysis.